House prices continued to show moderate but steady growth during November, according to the Nationwide house price index.
House prices were up just 0.1 per cent between October and November, as the average price reached £209,988. On an annual basis, growth remained stable at 2.5 per cent in November. However, a sharp downturn was noted in comparison to the 4.4 per cent during November the previous year.
Nationwide’s chief economist, Robert Gardner, said: ‘Low mortgage rates and healthy rates of employment growth are providing support for demand, but this is being partly offset by pressure on household incomes, which appears to be weighing on confidence. The lack of homes on the market is providing support to house prices.’
Mr Gardner also commented on the recent budget, stating that it was unlikely that the government’s decision to abolish stamp duty for first time buyers purchasing properties for up to £300,000 would have any real impact on demand.
He continued: ‘In many regions, first time buyers already paid little or no stamp duty as the price of the typical first time buyer property was below the previous threshold of £125,000. The potential savings are more substantial for borrowers where house prices are higher, especially in London and the south east.’
The Nationwide house price index published figures which demonstrated that the average first-time buyer in the north of England would save approximately £500 in stamp duty following the changes. In contrast, the average first-time buyer in London would save more than £3,000. However, due to London’s disproportionately high prices, buyers in the capital may still pay stamp duty. Nationwide found that 81 per cent of London’s first time buyers would still be eligible for the tax.
Founder and chief executive of eMoov, Russell Quirk, said: ‘A muted but stable level of house price growth is probably the best we could hope for at this time of year, given the usual seasonal slowdown coupled with already tougher than normal market conditions. It’s very early days to be observing any kind of impact from the changes to first-time buyer stamp duty and while it may help stimulate demand, and in turn prices, this will only be noticeable much further down the line. I certainly wouldn’t be holding my breath where the encouraging signs for housing supply are concerned. Should the government continue to fail in delivering a meaningful number of new homes, which it no doubt will, the overwhelming levels of buyer demand to stock available will keep prices climbing throughout next year.’